Sprint is expected to report a big loss of subscribers in its next earnings report, expected Feb. 11, further fueling speculation that No. 3 carrier Sprint has to merge with brash and bold " Un-Carrier" T-Mobile US.

Japan's SoftBank owns 80% of Sprint and is reportedly seeking ways to raise the cash needed to buy out Deutsche Telekom's 67% share of T-Mobile. The move comes as T-Mobile is gaining subscribers and Sprint is losing them, partly due to recent network disruptions.

On Jan. 8, T-Mobile announced it had added 869,000 net subscribers in advance of its fourth quarter 2013 earnings call, set for Feb. 25.

Meanwhile, analysts say that Sprint could report losing up to 500,000 subscribers in the fourth quarter of 2013. If it proves true, the number would be more than double the 243,000 subscriber losses Sprint reported for the final quarter of 2012.

"I expect Sprint to report a big subscriber loss, maybe around 400,000 to 500,000 for fourth quarter 2013, and a lot of those subs are going to T-Mobile," said Eric Costa, analyst at Technology & Business Research in an email to Computerworld.

The recent increases in T-Mobile subscribers and the losses predicted for Sprint are of the "postpaid" variety -- customers that pay monthly service fees after services are incurred. Prepaid plans have gained more popularity in the past two years as carriers offer lower cost smartphones and a variety of data plans when paid in advance.

Several analysts said a decision by Sprint to buy T-Mobile depends on a number of factors, including whether the deal can pass muster with regulators. Another big unknown is whether Dish Networks will attempt to buy T-Mobile to establish a bigger stake in fixed wireless services.

"I'd say it's looking likely that Sprint will try to buy T-Mobile, yet it will be a battle to get through regulation," Costa said.

Sprint's chances with regulators would be better than AT&T's in its failed effort to buy T-Mobile in 2011, partly because Sprint is smaller than AT&T and has performed poorly in recent quarters, he added.

Other analysts say that regulators at the Federal Communications Commission and Federal Trade Commission, may favor keeping T-Mobile as the No. 4 carrier, given its recent successes and the need to have four significant carriers in the U.S.

Sprint and T-Mobile wouldn't comment on speculation that a merger deal may be in the works.

The combined subscriber base of a merged Sprint-T-Mobile would be about 98 million, including 51 million postpaid. By comparison AT&T has about 110 million total subscribers, 73 million postpaid, and Verizon Wireless has 122 million total and 97 million postpaid, based on third quarter reports.

As of Oct. 31, Sprint had 54.9 million total subscribers, 30.9 million postpaid.

Bill Menezes, an analyst at Gartner, said he doesn't think it's advisable for Sprint to merge with T-Mobile.

"It's unclear that the continuing organizational disruption at Sprint from integrating another mega-merger would benefit the company in the long run or would benefit customers," he said in an email. "Sprint's already running behind in its turnaround and that's costing it customers."

Menezes said that Sprint customers, including large enterprise customers, are untrusting of Sprint because of network disruptions that hit during Sprint's expansive Network Vision upgrade, which included the addition of LTE wireless technology.

"My guess is that [subscriber losses] could spike if they announce a merger," Menezes said. "Numerous Sprint enterprise customers already have suffered transient, but significant service disruptions due to the Network Vision upgrades. Many customers are pissed and many have left the company as a result."

T-Mobile, by contrast, has a small share of large business customers, Menezes said.

While Menezes opposes a Sprint-T-Mobile merger, analyst Jack Gold at J. Gold Associates said it should happen, mainly to challenge what he called the AT&T and Verizon "duopoly."

A combination of Sprint and T-Mobile "would make for a viable third competitor in the U.S. market where the minor players are shrinking," he said. "The argument that a merger would lower competition with fewer choices is only valid when the competition is on equal footing and has the potential to make a difference in cost structure or products. With Sprint so far behind, I don't think you could make that argument."

Gold said T-Mobile can't continue to lure more subscribers through its UnCarrier initiatives, which include making hefty payments for smartphones and rebates, if it hopes be profitable for the long term. "Even T-Mobile has limited marketing capability against the duopoly of Verizon and AT&T," he said.

Gold said that a combined Sprint and T-Mobile would provide an attractive combination of spectrum bands, improving network speeds and coverage.

Given it will take years for either company to fully transition to LTE, he said a combined company would have to maintain two network footprints for at least three to four years. "That keeps operations costs higher than they would like, but it's doable, and you can incentivize users to upgrade to new devices sooner," Gold said.

Sprint now operates at 800 MHz (via networks obtained through the Nextel acquisition); 1900 MHz (formerly used for Sprint PCS with 2G and 3G); and 2.5 GHz (former Clearwire spectrum which allows Sprint to create Sprint Spark to combine three bands for better network service.)

T-Mobile has spectrum in the 1700 and 1900 MHz bands and recently bought 700 MHz spectrum from Verizon. The only common band the two companies hold is 1900 MHz, Menezes noted, unless both companies buy some of the 600 MHz band in the next year or so.

The two companies could benefit by using carrier aggregation technology across their various spectrum bands. "Sprint and T-Mobile have for some time had the largest aggregate spectrum holdings, meaning that in many top 25 markets they will have the largest capacity to carry wireless traffic," Menezes added.

While Menezes doesn't believe the merger is a good idea, he said it's important to "never underestimate Softbank [with its] long-term perspective on the market that will enable it to ride out the short-term disruptions that would attend a T-Mobile acquisition."

SoftBank could also have bigger, global plans.

"The big wild card here could be Deutsche Telekom and what Softbank might be arranging with DT with its huge international networking and cellular footprint," Menezes said. "SoftBank is always a 'strategic' buyer."

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